ETHANOL TRANSPARENCY PROJECT

The Ethanol Transparency Project (ETP) is a jointly sponsored program
of the Agribusiness Council (ABC)’s Heritage Preservation Committee and
State Agribusiness Council Coordinating Committee (S/ABC).

Background
As a sequel to ABC’s Ag Corruption Project (ACP), which focused on
concentration and anti-competitive price-fixing in the ag/food economy
during the mid-1990s, ETP galvanized in the aftermath of the Energy Policy
Act of 2005. This highly controversial law, among other requirements,
mandated a massive increase in ethanol use to 7.5 billion gallons in
blended gasoline by 2012. The resultant market volatility with fuel and
food price spikes – consequences of higher animal feed costs, market
volatility and oil refining uncertainties – has led to a widened public
awakening on the growing distortions and hidden costs of ethanol’s empty
promises.

As public curiosity and investment surrounding the ethanol "craze" has
increased, so has a new recognition: the so-called ethanol industry (based
largely on agricultural commodities -- primarily corn) is one of the most
shrouded and non-transparent sectors in the ag/energy nexus. More
enlightened public participation is needed in this growing policy debate;
and the lack of impartial facts on ownership and control of ethanol
production – transportation, marketing, finance – warrants a more careful,
timely illumination.

Ethanol benefits are very mixed for many farmers. It is increasingly
clear that cattle ranchers, chicken farmers, dairymen, hog farmers, and
others are suffering -- and thus, the food system and energy nexus, in
general, are also in acute distress.

American taxpayers and legislators need to understand who are the
primary beneficiaries of this massive, multi-tiered and federally-mandated
subsidy/tax credit/tariff protection regime in order to chart a course to
resolve this problem.

EARLY
WARNINGS—Nicholas Hollis has been outspoken since the mid-1980s,
describing ethanol subsidies as a
form of Russian roulette with the world economic system.

Problem
The lack of transparency in ethanol is not accidental. Over a
period of nearly thirty years, since ethanol was "re-activated" during the
Carter Administration after OPEC’s second oil price shock, the corn-based
fuel additive has advanced behind a phalanx of trade associations, captive
farm cooperatives, public relations/law firms, and media programming and
campaign contributions. A corresponding masking of key facets in this
inexorable surge – has shrouded an alarming concentration of actual
control within ethanol’s "inner circle" – and led the United States into a
dangerous dilemma which now threatens our nation’s economy and democratic
institutions. Remedial steps must begin with education on the truth
concerning ethanol’s many claims and the nature of this complex,
subsidy-driven regime.

Ag Corruption Project
ABC and its international affiliate, Agri-Energy Roundtable (AER),
have been outspoken critics of agricultural
subsidies
and growing concentration in key ag sectors since the mid-1980s. These
interlinked issues have resulted in fundamental distortions to our
nation’s food system and threatened our agricultural heritage, leading to
the disappearance of America’s independent family farmers. Similarly, the
complex weave of subsidies and political influence accelerates
non-economic, anti-market policies which undermine international trade and
development thereby damaging the U.S. role as the world’s most reliable
and abundant "breadbasket."

ABC initiated the Ag Corruption Project (ACP) following revelations
stemming from the ADM price-fixing case plea settlement of October 1996
and subsequent U.S. District Court-Chicago cases (United States v.
Andreas et al - 96 CR 762). Numerous memoranda and articles were
developed and circulated, culminating in two speeches: (1) Economic Crime
Summit in St. Louis, Missouri (April 1998) sponsored by the Department of
Justice/National White Collar Crime Center and (2) BioEnergy ’98 (October
1998) in
Madison, Wisconsin. The speeches were delivered by ABC president
Nicholas E. Hollis and generated widespread interest, particularly the
BioEnergy speech which provided a history of certain anti-competitive
actions linked with ethanol expansion and the association sector.

Notwithstanding these efforts, the "ethanol juggernaut" continued to
gather political support. Today, the headlong rush to erect dozens of
planned new ethanol production facilities in response to the
artificially-created markets (Energy Policy Act of 2005 and Energy
Independence and Security Act of 2007) has reached a
"tipping point" which carries enormous economic and environmental risks.

Action Plan
ETP is generating information through news articles and media
appearances with a focus on ethanol’s inner workings. ETP is providing
memoranda and advisory services to a growing subscriber network of
journalists, decision-makers, and activists researching aspects of
ethanol. Drawing upon ABC’s extensive database/historical archives on
ethanol and the ongoing public policy debate, ETP is offering services and
educational materials useful to local, state, and the broader
national/international debate surrounding ethanol (and other biofuels).

Results include increased information flow, new contacts leading to
productive networking, activist success in curbing local
environmental abuses, Washington dialogue among affected groups, and
timely public policy inputs to Congress and the Executive Branch.

Leadership
Founded in 1967 after a White House meeting between President
Lyndon Johnson and Henry Heinz of Heinz Food Company, the Agribusiness
Council (ABC) has developed considerable experience in working with
agricultural and mainstream media as well as state/local agricultural
organizations. ABC’s Heritage Preservation Committee (HPC) has been in the
vanguard of efforts to protect agricultural history in coordinating with
state counterpart associations, historical societies, and others
interested in preserving agriculture’s role in the broader understanding
of American history.

ABC president Nicholas E. Hollis has been outspoken about ag subsidy
distortions, including ethanol, since the early 1980s. Previously he
organized and led campaigns for export expansion in staff leadership
positions with the U.S. Chamber of Commerce, the National Association of
Manufacturers (NAM), and the State Department (USAID), spearheading more
than 70 missions abroad to promote U.S. export trade/development. More
recently Hollis has been interviewed on Fox New Channel’s
"Weekend Live" (see
video), Wisconsin Public Radio, Minneapolis FM-1280 Radio’s "The
Patriot," sponsored by the Taxpayers League of Minnesota, and he has
been quoted on ethanol issues by
CBS News, Associated Press,London Financial Times,
Chicago Tribune,
Milwaukee Journal Sentinel, Fredericksburg Freelance Star,
Culpeper Star-Exponent, Miami Herald, Roll Call, Legal Times
and others. Since 2003, he has visited/lectured in 38 states and 6
countries while publishing more than 250 articles on ethanol (see
Archives).

BIOFUELS IN ASIA—Nicholas Hollis addresses media at press briefing after
ASEAN regional conference in Manila which included sessions on sugar
cane/bagasse energy technology.

Method of Operation
ETP utilizes grants and subscriber funds to develop research and
educational kits on aspects of the "ethanol regime" in relation to key
economic, environmental,
political, and organizational dimensions of the ethanol phenomenon. ETP
circulates and publicizes results of its past/present research via
internet articles, traditional media, and educational institutions.

A example of ETP campaign operations is illustrated in the
Milwaukee Journal Sentinel article, "Lawmakers Push State
Ethanol Mandate" (January 30, 2005 -- see excerpt). This effort helped
spark an activist drive around the Badger State targeting Madison
lawmakers which eventually blocked the proposed 10% ethanol blend
requirement under consideration by the Wisconsin State Senate (March
2006). Other states – including Iowa, Colorado, North Dakota – have also
blocked ethanol mandates.

Future Direction of Activities
ETP will survey contributors and subscribers (including anonymous
donors) with the objective of convening those interested in developing
programs and activities surrounding ethanol issues. Numerous local
coordinators around the country are already networking with ABC program
coordinators and directors. ABC/ETP will provide resources and inspiration
to lead the country out of the ethanol "box canyon."

Supporters
ETP is partially supported by voluntary contributions from
individuals, foundations, and organizations seeking a researched
counterpoint on ethanol presented to the public. In particular, supporters
want promulgated research to lift the fog currently shrouding the
inner-workings of the so called ethanol industry.

Budget
ETP is financed through contributions, grants, honoraria, and
private donations as its programs reach further into the public policy
debate on ethanol. Private funding is essential to maintain the program’s
independence from individual institutions, government agencies, and/or
sector groups with specific agendas.